Today, I will be presenting the House of Commons supplementary estimates (B) for fiscal year 2012-2013.

These proposed supplementary estimates for the House of Commons total $1,586,000. I'd like to stress at the outset of this discussion that all items included in the House of Commons supplementary estimates (B) were presented to and approved by the Board of Internal Economy.

For reference purposes, you have received a document showing the voted appropriations that are included in the supplementary estimates (B). To facilitate today's discussion, I will provide a brief overview of each item in the order that they have been presented.

Our first item is a budgetary reduction of $7,427,000, which is a result of the multi-year plan to reduce costs as part of the House of Commons' strategic and operating review. On March 12, 2012, the board approved these savings and a reduction strategy that will see spending for the House of Commons decrease by over $30 million, or nearly 7% of the overall budget. These reductions will be phased in and fully implemented by 2014-15.

The reductions for fiscal year 2012-2013 will be achieved through reductions to House Officers' Budgets and operational efficiencies; reductions for committees, parliamentary associations and parliamentary exchanges; and reductions for the House Administration.

I will now take a moment to address each area of reduction in turn.

First, the board approved an overall reduction of $1.8 million to House officers' budgets, which represents $600,000 for fiscal year 2012-13.

Additionally, a number of initiatives will be undertaken to achieve efficiencies through service delivery transformation. An example of this is the reduction of printing of parliamentary publications, which has been facilitated by a steady decrease in requests for paper copies and improved access to online parliamentary information. For fiscal year 2012-13, these savings will amount to $623,000.

Second, the reductions for committees, parliamentary associations, and parliamentary exchanges will total $2.575 million. These reductions are in line with measures taken by members of committees, parliamentary associations, and participants in parliamentary exchanges, and they will continue their ongoing efforts to limit spending and find efficiencies.

Finally, cost savings and reductions of $3,629,000 for the House Administration budget will be achieved through a combination of budget reductions, operational efficiencies achieved via service delivery transformation, attrition, and the elimination of some vacant positions.

It is important to note that care is being taken to minimize the impact on employees of the House Administration. Additionally, the House Administration has in place a Work Force Adjustment Policy to ensure that all employees are treated fairly should they be impacted by changes to its work force.

I will now move on to discuss the $8,632,000 that is required for the carry-forward policy. The carry-forward policy, which was approved by the board in 1995, allows members, House officers, and the House administration to carry forward lapsed funds into the new fiscal year, up to a maximum of 5% of the respective operating budgets from the previous fiscal year. This policy is beneficial, as it provides increased budgetary flexibility, reduces potential pressure to spend at year end, and provides an incentive to underspend.

The funding included in the carry forward is divided as follows: for members and House officers, $5.4 million; for committees, parliamentary associations, and parliamentary exchanges, $466,000; and for the House administration, $2,766,000.

It is important to note that this is not new money being spent, but rather an accounting of some resources not used in last year's budget and being made available for use this year. Therefore, while this item does constitute an expense in the presentation of the estimates, it could also reasonably be looked at as savings from budgets of the previous year. It is also reasonable to predict that some funds budgeted for this year will lapse, in addition to the reductions and cost savings that I previously mentioned.

The final item mentioned in the estimates is $381,000, an amount required to accommodate for special requirements of members.

I am sure we all can agree that it is essential that all members of the House of Commons be afforded the resources required so that they may fulfill their parliamentary functions. We must also ensure that any special requirements of members be adequately considered such that they are not inhibited in their duties.

That said, please be assured that all requests for additional funding to accommodate members are subject to review by the Board of Internal Economy. Ongoing analysis is conducted to ensure that accommodation requests are being managed in the most fiscally responsible way possible.

This concludes my overview of the House of Commons supplementary estimates (B) for the fiscal year 2012-13.

I and those accompanying me will be happy to answer any questions you may have.

Simply for clarification, in case there needs to be any, could you briefly inform us of the role of the Board of Internal Economy in the budget process? In other words, you say that all of the suggested additional operating cost appropriations you're requesting have already been reviewed and approved by the Board of Internal Economy. When you say “approved”, what oversight did they have as compared with this committee?

The board, of course, determines the levels of funding for each of the budgets that are made available for members of Parliament, meaning things like the members' operating budget and travel status budget, in addition to setting policies regarding travel and so on.

In addition, it oversees the House administration, so when resources are required, the request comes to the board. The board is given a presentation by Mr. Watters and Madam O'Brien, and it then makes a decision thereon.

That's the function the board serves: it determines the needs of members, determines the levels of funding, and then seeks the appropriate funding through the estimates.

More than anything else, though, I'm wondering...if you're going to the board first and the board had problems with any budget you're requesting, can they put a veto on it? Again, what is the role of the board compared to this committee? Who has the ultimate hammer in terms of oversight?

The board makes the decision as to what goes into the estimates. A member of the board can have an idea or the administration can come with a suggestion; we talk about it and make a decision as to what will be presented to the House for the estimates, then ultimately it gets voted on by this committee and by the House.

In terms of what goes in the estimates, the board's the authority. In terms of what happens to the estimates, the House is the authority.

Clear as mud, thank you very much, but we won't get into that. It could be a discussion for another day.

I want to ask you a couple of quick questions now.

With the passage of Bill C-46, the act to amend the retiring allowances of members of Parliament that was passed into law in November of this year, do you anticipate any savings in contributions to the members in the retiring allowances and the compensation arrangement accounts to be realized this fiscal year?

I know that there'll obviously be an impact on members and their retirement pensions, but what savings will the House realize this fiscal year and ongoing?

Treasury Board, as the administrator and plan sponsor for the account, looks after establishing contribution rates and funding requirements for the particular plan. We anticipate that as those changes come into effect and as the demographic changes and the plan experience changes, we will be advised by Treasury Board of what the new contribution rates will be. For the time being, they are unchanged.

There was a slight amendment this year to the retirement account. A contribution from the employer that had been made in the past of about $600,000 a year is no longer required to be made, but that has nothing to do with the new changes to the plan.

As those are implemented, the experience in the plan will change, and then the contribution rates will change for both the members and for the House as a de facto employer. We will be advised of what the new rates will be, and only then will we start to see savings in those particular budgets. Those are in the statutory part of our appropriation and the statutory part of our vote, and we'll be advised of those, as I said, when the change takes place.

Generally speaking, it's the same question we ask every time anyone comes here for supplementary estimates. You requested an additional $1.5 million, roughly. What changed between your initial budget and the request for $1.5 million now?

Very simply, other than the additional requirements for certain members with unique requirements, what you're seeing is a little over $7 million dollars’ worth of savings, and then the carry-forward.

We've had a policy since 1995 of allowing members to carry over in-House administration. Although we know that's going to happen, we don't know exactly how much. The accounting method used is that it gets lapsed back in the year it's not spent and then brought forward in the supplementary estimates for the next year.

For example, if you leave $10,000 in your MOB and you’re going to use that for a carry-forward for accounting purposes, that goes back and then gets reallocated. That's why you're seeing the $1.5 million. That's actually much less than the $8 million dollars’ worth of carry-forward because of the $7 million saved through the SOR, both on the House administration and on the members’ fund.

Thank you very much for being here today, Ms. O'Brien and Mr. Scheer. It is always a pleasure.

I have some more general questions.

When you came to present your main estimates in May, we discussed the possibility of combining security services to achieve savings. Could you give us the last updates on that subject and tell us whether that would be possible?

Two committees, one in the Senate and the other in the House of Commons, began addressing this issue. There are some ideas from the Senate and some others from the House. We have managed to find solutions to meet the demands of both Houses. The work is ongoing, and I hope we have a highly detailed proposal to submit to the Board of Internal Economy in the not too distant future.

We have already started seeing savings in the budget on members' travel expenses. This item appears in a statutory appropriation because it is something allocated to members by legislation.

Last year, while the House of Commons was sitting, there were savings of approximately $3.6 million for travel expenses under the statutory appropriation. This was a combination of two things: first, the flight passes; and, second, the fact that members travelled a little less. An election was held last year, and that had an impact on budgets.

We note that the same trend has continued this year. When we examine the statutory appropriation for travel expenses, we also see savings this year. This is mainly due to the fact that members are using their flight passes approximately 20% of the time. As you know, they will be mandatory for everyone starting in April 1, 2013. However, some have already begun to use them, and the savings are considerable.

The objective, if you recall the strategic review, was to save approximately $5 million by using the passes, and we believe we can achieve that.

Let us stay on the topic of travel expenses. We had a discussion about the fact that, as a result of the increase in travel expenses, particularly for air travel, funding provided for in the budgets might not be sufficient. However, the situation appears to be going well at the present time. Is that as a result of the savings that have been achieved using the passes?